Shareholder derivative action on behalf of biomedical device company Sanovas, Inc., alleging that the former CEO stole company funds and was able to do so because the company lacked meaningful internal controls. After issuing temporary restraining orders against the defendants, the Marin County Superior Court entered a stipulated judgment establishing significant governance reforms, including the addition of independent directors, an audit committee, board observer rights, required board meetings and annual shareholder meetings to elect directors. The former CEO was tried and found guilty in federal court on multiple criminal counts.
